Have Conservatives Misunderstood Pope Francis’ Economics?

Last time we looked at The Pope’s Apostolic Exhortation we focused on the 210 pages that had to do with the joy of evangelism. But the American press focused instead solely on the seven pages that had to do with money and economics. This by itself is quite a commentary, suggesting that Francis was not wrong when he observed that the worship of money has become the modern idolatry.

Below we’ll take a look at much of the reaction, but let’s keep in mind that this section was not a primary, or even important, topic in the paper. It was there mostly to set the context in which evangelism must operate today. The Pope is not an economist and is not even speaking primarily about the American economic system.

The man was a Jesuit priest in Argentina. He has no reason to know the nuances of political discourse in the United States. So when he uses terms like “trickle down economics” it is not because he is endorsing the Democratic Party’s critique of Ronald Reagan’s economic program or commenting on the 1980’s policy disputes between Jack Kemp, Art Laffer and David Stockman.

That the American Left reacted so triumphantly and the Right so defensively is either silly or sad. Although it is also interesting that both sides, secularists all, should be so concerned about the writings of a man of God. Maybe there is hope, after all.

Francis makes some fairly conventional points about how “humanity is experiencing a turning-point in its history” and how, while great progress has been made in areas such as health care, education and communications, it is still the case that “the majority of our contemporaries are barely living from day to day, with dire consequences,” and that “many people are gripped by fear and desperation…”

These things are true and much discussed across the political spectrum. Moving from the industrial age to the information age is creating great turmoil and economic uncertainty in the United States but even more all across the globe. The educated elite is doing very well while blue collar workers are struggling. The media obsesses over the George Zimmerman/Trayvon Martin incident while ignoring the slaughter of children on the South Side of Chicago. Millions upon millions of Syrian refugees are living in misery in tent cities and the world’s political leaders do next to nothing to help.

Perhaps Francis’ most controversial statements are these –

“… some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.”

And –

“While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few.”

Now some take these lines and distort them to fit their political agenda. Writing in the National Review, James Pethokoukis provides a stark example –

“Slate columnist Matthew Yglesias, a liberal, approves of how Pope Francis “really lights into libertarian economics” but adds that there’s “lot of stuff about Jesus in his thinking that I can’t really sign on to.”

Imagine – all that “Jesus Stuff” coming from a Pope! He’d be great if it weren’t for that.

On the other hand, writing in The Federalist, David Harsanyi takes just the opposite stance. The Pope’s Exhortation is “a beautiful document and a joy to read…” when he sticks to theology, but when he discusses economics –

“…the Pope didn’t simply point out that the wealthy weren’t doing enough to help alleviate poverty. He used the recognizable rhetoric of the Left to accuse free-market systems of generating and nurturing that poverty. And these platitudes — things that run wild in the liberal imagination like unfettered capitalism and “trickle-down” economics — were clearly aimed at the United States.”

In other words, the “Jesus stuff” is great but not the economics.

But some people don’t like “the Jesus stuff” or the economics. Writing in Reason Magazine, Shikha Dalmia takes a tiresome poke at the Church for getting 60% of its money from the United States and being “reportedly the largest landowner in Manhattan (which) puts undisclosed sums into its coffers.” Therefore, “the new Pope needs to be careful not to bite the hand that feeds his institution….” She adds that it is ironic that the Pope “is speaking for an institution that excludes half of humanity—women—from the ranks of priesthood.” (I’m not sure I see the irony, other than just a slam at the Church.)

All of the writers on the right point out that capitalism has done more to reduce global poverty than any system ever devised, and certainly more than the Church has done. The argument is summed up by Harsanyi –

“The World Bank estimates global poverty was halved from 1990 to 2010. In fact, according to the World Bank, the United Nations’ “millennium development goal” of cutting world poverty in half by 2015 came in five years ahead of schedule despite a major global recession. The decline in poverty coincides, not coincidentally, with developing nations embracing more market-based systems.”

“Pope Francis was interviewed in Italy’s “La Stampa” newspaper regarding, among other things, the controversy generated by “The Joy of the Gospel”. In it, he made clear that he is merely pointing to the Church’s Social doctrine…. That Doctrine … specifically rejects collectivism and socialism by name. It recognizes that all of society is ordered to the individual and that the individual is not created to serve society…. In short, Catholic Doctrine absolutely rejects all big government, central economic planning, elite groups at the top and anything that violates the individual dignity of human beings. That is why the Pope offered in that interview “I am no Marxist”.

McKalip goes on to quote from the “Compendium of the Social Doctrine of the Catholic Church” and the “Catechism of the Catholic Church” –

On True Free Markets:

…“If by ‘capitalism’ is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a ‘business economy’, ‘market economy’ or simply ‘free economy’.”

On False “Free” Markets:

“…. But if by ‘capitalism’ is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative. In this way a Christian perspective is defined regarding social and political conditions of economic activity, not only its rules but also its moral quality and its meaning.”

On the Responsibility of the State:

”Economic activity, especially the activity of a market economy, cannot be conducted in an institutional, juridical, or political vacuum. On the contrary, it presupposes sure guarantees of individual freedom and private property, as well as a stable currency and efficient public services. Hence the principal task of the state is to guarantee this security, so that those who work and produce can enjoy the fruits of their labors and thus feel encouraged to work efficiently and honestly . . . . Another task of the state is that of overseeing and directing the exercise of human rights in the economic sector. However, primary responsibility in this area belongs not to the state but to individuals and to the various groups and associations, which make up society.”

McKalip Summarizes –

“So to be clear, Pope Francis is attacking the practices of an elite who sit atop an unnatural economic system. That is a system in which the elite set the rules, debauch our currency, and invent wealth redistribution programs ostensibly to serve the poor, but that really serve politicians and the rich. The Pope rightfully points to an economy of “Exclusion” and “inequality”. Such economic problems are present in the one created by global bankers and politicians cause massive economic bubbles in the housing markets that then burst and cause major economic exclusion and inequality which cause massive economic crashes and displace people from their homes or cause them to lose life savings.”

McKalip’s analysis is supported by Donald Devine, also writing in The Federalist. Devine argues that the Pope’s view of capitalism may have been tainted by his experience in Argentina, which at the dawn of the 20th Century was “among the ten wealthiest nations per capita in the world,” but dropped to 70th one hundred years later, mostly due to the “crony capitalism” (which I would call Fascism – private ownership of state sanctioned companies) described by McKalip. Devine explains –

“In Argentina, Peron created what was perhaps the first comprehensive welfare state, trading benefits to the masses for their political support. Since there never were enough funds for everyone, a state capitalism under strong political regulation was developed to direct benefits to powerful clients such as unions and producers without so fettering the businesses as to deprive him (Peron) of the wealth needed to support his regime. Under Argentina’s many forms of repressive government, capitalists could only survive by being political partners of the state, sometimes its power behind the throne but more often too powerful to eliminate but clearly having to defer to state power to remain in business.”

All of this should be very familiar to an American audience. The extreme reaction from Left and Right is perplexing to me. Those of us who pay attention to politics and economics in today’s United States are very familiar with the idea of Wall Street versus Main Street, with the bailout of big national banks to the disadvantage of local and regional banks: To the obscene subsidies offered Solyndra and other “green energy” companies, and the war on disfavored coal companies: To tax breaks offered to rich farmers who don’t farm and movie studios that produce lousy movies: To a Washington DC area that is now the home of seven of the ten richest counties in the country.

Actually, in The Transom, Ben Domenech expresses it better than I can by quoting Richard Reeves –

America, in 2014: The affluent, the squeezed, and the entrenched. “At the top, we can see an elite doing well in a labor market offering big returns to human capital. This is perhaps not the just the top 1% (much though politics might be easier if that were so) but, say, the top decile, or 10%, of the income distribution.

This stratum is not only prospering economically. For the people on this top rung, education levels are high and rising. Families are planned, marriages strong, neighborhoods safe and rich in social capital, networks plentiful, BMIs low and savings rates high.

Below this affluent class is a broad swath sometimes dubbed the ‘squeezed middle.’ This group have decent labor market participation rates, but wages that are rising slowly. In many cases, two wages are needed to support the family. They own a home, but are not otherwise wealthy. Savings exist for emergencies or one-off expenditures, but run out fast if the household has a serious downward shock to income. Private schooling is rarely an option, financially…

At the bottom of the social scale are those whose poverty is entrenched. Labor market attachment is weak, with many people in long-term unemployment. Teen pregnancy is still heard of, unlike in most communities today. Poverty is felt in most domains of life – crime, health, education, parenting, drug addiction and housing. The growing economic segregation of neighborhoods further isolates this group from chances of work, better schooling or valuable social networks. Upward intergenerational mobility rates are low.”

Our government is busy picking winners and losers in the economy based solely on political considerations, while median incomes have fallen, jobs disappear, and the people are forced to rely on food stamps to survive. THIS is what the Pope was objecting to. And it is far worse in many of the countries of Africa, Asia and South America. He is right – working people are being trampled under the feet of a self-centered elite, and no one is blowing the whistle on it – except Pope Francis. Thank God for him.

Greg Scandlen has over 30 years experience in health care financing. He is an advocate of patient empowerment, consumer choice, and increased competition. As founder of the Council for Affordable Health Insurance in 1991 and Consumers for Health Care Choices in 2004, he helped get Health Savings Accounts enacted and implemented. He is now retired and living in Waynesboro, PA where he is active in his church and local politics.

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